Agencies Release Final Rule on “Fair Pay and Safe Workplaces” Executive Order

Littler
Contact

On August 24, 2016, the Department of Defense, General Services Administration, and National Aeronautics and Space Administration (FAR Council) released the final rule implementing the “Fair Pay and Safe Workplaces” Executive Order (EO). Simultaneously, the Department of Labor (DOL) released final guidance on key provisions of the final rule.  The so-called “blacklisting” EO requires prospective and existing contractors on covered contracts to disclose administrative determinations, arbitral awards, and civil judgments (referred to collectively in the rule as “labor law decisions”) finding or (sometimes even just alleging) violations of 14 enumerated labor laws and state law equivalents. 

Contracting officers, in consultation with agency labor compliance advisors (ALCAs), a new position created by the EO, must then consider the decisions, (including any mitigating factors and remedial measures), as part of the contracting officer’s decision to award or extend a contract.  Specifically, the contracting officer will consider such information in determining whether a prospective contractor is responsible and has a satisfactory record of integrity and business ethics. While the final rule and guidance did make limited favorable changes for contactors, namely a phased-in implementation schedule, it closely tracks the proposal in creating onerous burdens on contractors.  In rejecting many of the concerns raised by the contractor community, government contactors face significant new costs, risks and uncertainty in seeking to do business with the federal government.

Preaward Disclosure Requirements

Under the EO, when bidding on covered federal contracts, contractors will be required to attest to whether they have had violations of the covered labor laws resulting in any “administrative merits determinations, civil judgments, or arbitral awards or decisions” issued within the preceding three years. It has been left to the DOL to define the scope of such reportable violations or “labor law decisions.” Like the proposed guidance, the DOL has retained a broad interpretation of labor law decisions that would mandate reporting on enforcement agency findings- including findings that are not final or remain subject to appeal or further review. Specifically, an “administrative merits is defined as “ notices or findings – whether final or subject to appeal or further review – issued by an enforcement agency following an investigation that indicates that the contractor or subcontractor violated any provision of the Labor Laws.” Listed Among the agency findings triggering disclosure are a WH-56 "Summary of Unpaid Wages" form from the DOL’s Wage and Hour Division; a citation from the Occupational Safety and Health Administration (OSHA) or state agency, a show cause notice from the Office of Federal Contract Compliance Programs (OFCCP); a reasonable cause finding from the Equal Employment Opportunity Commission (EEOC), and complaint issued by a Regional Director at the National Labor Relations Board (NLRB).

In retaining the broad definition of “administrative merits determinations,” the DOL dismissed the concerns raised by many in the government contractor community.  For example, in its explanation of the final guidance, the DOL cited Littler’s Workplace Policy Institute comment characterizing a complaint by a NLRB Regional Director as “being based on “investigatory findings without judicial or quasi-judicial safeguards.” Nonetheless, the DOL retained the definition of administrative merits determinations for NLRA violations – and much of the other problematical definitions – as proposed.

Preaward Assessment and Advice

Section III of the Guidance explains the process by which ALCAs classify, weigh, and provide advice about a contractor’s violations of the Labor Laws during the preaward period. The final guidance clarifies that the ALCA’s preaward assessment of a contractor’s Labor Law violations and the contracting officer’s responsibility determination are separate process points, performed by two separate individuals: the ALCA assesses the nature of the violations and provides analysis and advice; the contracting officer, informed by the ALCA’s analysis and advice, makes the responsibility determination—the determination of whether the contractor is a responsible source to whom a contract may be awarded. The guidance describes a three-step process for the ALCA’s role in the contracting process. First, an ALCA reviews all of the contractor’s violations to determine if any are serious, repeated, willful, and/or pervasive. Second, the ALCA then weighs any serious, repeated, willful, and/or pervasive violations in light of the totality of the circumstances, including the severity of the violation(s), the size of the contractor, and any mitigating factors that are present. Third, after this holistic review, the ALCA provides written analysis and advice to the contracting officer regarding the contractor’s record of Labor Law compliance, and whether a labor compliance agreement or other action is warranted.

As with the definition of reportable labor law decisions, the DOL left most of the guidance defining “serious, repeated, willful or pervasive” intact from the proposal, despite objections about the vague and subjective nature of these terms. The DOL affirms that “the weighing process is not mechanistic, and this Guidance cannot account for all of the possible circumstances or facts related to a contractor’s record of Labor Law compliance.” However, the guidance does set forth certain factors that will weigh for or against a conclusion that a contractor has a satisfactory record of Labor Law compliance. Generally, the most important mitigating factor will be the extent to which the contractor has remediated the violation(s) and taken steps that will prevent recurrence in the future.  Other mitigating factors include where the contractor has only a single disclosed violation; where the number of violations is low relative to the size of the contractor, and a significant period of compliance. Conversely, violations that are pervasive or that fall within two or more of the categories (serious, repeated or willful), are of particular gravity, involve injunctive relief or are reflected in final orders, weigh against a satisfactory record of labor law compliance. The guidance explains that a “labor compliance agreement” may be warranted where the ALCA has concluded that a contractor has an unsatisfactory record of Labor Law compliance.

Public Availability of Disclosures and Assessment Information

One of the most concerning aspects of the blacklisting rule to contractors is no doubt the public availability of disclosures and assessment information regarding labor law decisions. Some commenters suggested that protections be put in place to protect confidential and proprietary information in disclosures made by contractors pursuant to the Order’s requirements. Several also suggested that any information disclosed by contractors and made publicly available should be redacted to remove any personally identifiable information. Some commenters were concerned that the release of information disclosed by contractors would have a negative effect on a contractor’s business and reputation, especially if there are errors in the data presented. Despite these concerns raised with the proposed rule and guidance, the final version continues to require representations and disclosures regarding each Labor law decision to be reported through the Federal Awardee Performance and Integrity Information System (FAPIIS). where it will be publically available.

Paycheck Transparency

The EO requires covered contractors and subcontractors to provide wage statements to covered workers, giving them information concerning their hours worked, overtime hours, pay, and any additions to or deductions made from their pay. The EO also requires covered contractors and subcontractors to provide to workers whom they treat as independent contractors a document informing them of their independent contractor status. Contractors and subcontractors must also provide written notice to inform workers if they are exempt from overtime pay.  The requirement to provide notice of exempt-status raises the stakes even further of proper classification, particularly in light of the new white collar overtime regulations. The required independent contractor notice itself takes on added import and risk given the DOL’s assault on alleged misclassifications of employees as independent contractors and recent related guidance.

Arbitration Restrictions

Finally, contractors with contracts for goods or services worth more than $1 million, are prohibited by the EO and final rule from entering into agreements with employees for mandatory arbitration of certain civil rights claims. This provision covers claims arising under Title VII, or any tort related to or arising out of sexual assault or harassment. Contractors would be able to arbitrate such claims only if the employee filing the claim voluntarily agreed to arbitration after the dispute arose. Contractors would be required to include this provision in subcontracts worth $1 million or more. The prohibition does not apply to employees covered by a collective bargaining agreement negotiated between the Contractor and a labor organization representing the employees; or employees or independent contractors who entered into a valid contract to arbitrate prior to the contractor bidding on a contract covered by the EO. However, this exception does not apply if the contractor is permitted to change the terms of the contract with the employee or independent contractor; or when the contract with the employee or independent contractor is renegotiated or replaced.

Phased-in Implementation

The proposed rule and guidance left a number of important questions unanswered, such as the treatment of subcontractor reporting and coverage of “state law equivalents.”  The implementation schedule for the final rule reflects, to some degree, the immense challenges that implementation of these new rules will place on both the government and contractors.

For the first year that the regulations are effective (beginning October 25, 2016), only prime contractors must make disclosures. Subcontractors will not be required to start making disclosures until October 25, 2017.

  • For the first six months that the rule is effective, disclosure requirements will only be included in solicitations valued at $50 million or more. Disclosure requirements will be included in solicitations valued at $500,000 or more beginning on April 25, 2017.
  • The initial period for which labor violations must be disclosed is limited to one year and will gradually increase to three years by October 25, 2018.
  • The rule’s paycheck transparency requirements will become effective January 1, 2017.
  • The Executive Order provides that contractors and subcontractors will also be required to disclose violations of state labor laws that are equivalent to the 14 federal labor laws identified in the Order, and directs the DOL to provide guidance as to which state laws are equivalent. This requirement will be phased in at a later time, with the exception of OSHA-approved state plans, which are included in the guidance and regulations issued today.

Release of the final rule implementing the “Fair Pay and Safe Workplaces” EO comes as efforts are still underway by Congress to exempt Department of Defense contractors from its application. The outcome of these efforts in the pending National Defense Authorization Act legislation remains uncertain. The EO and its implementation also face likely challenges in court. With legislation and legal battles over the blacklisting rule likely still ahead, contactors are facing serious challenges, risks and burdens in complying with the EO and doing business with the federal government.

Additional analysis from Littler on the final rule and guidance will be forthcoming.  

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Littler | Attorney Advertising

Written by:

Littler
Contact
more
less

Littler on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide

JD Supra Privacy Policy

Updated: May 25, 2018:

JD Supra is a legal publishing service that connects experts and their content with broader audiences of professionals, journalists and associations.

This Privacy Policy describes how JD Supra, LLC ("JD Supra" or "we," "us," or "our") collects, uses and shares personal data collected from visitors to our website (located at www.jdsupra.com) (our "Website") who view only publicly-available content as well as subscribers to our services (such as our email digests or author tools)(our "Services"). By using our Website and registering for one of our Services, you are agreeing to the terms of this Privacy Policy.

Please note that if you subscribe to one of our Services, you can make choices about how we collect, use and share your information through our Privacy Center under the "My Account" dashboard (available if you are logged into your JD Supra account).

Collection of Information

Registration Information. When you register with JD Supra for our Website and Services, either as an author or as a subscriber, you will be asked to provide identifying information to create your JD Supra account ("Registration Data"), such as your:

  • Email
  • First Name
  • Last Name
  • Company Name
  • Company Industry
  • Title
  • Country

Other Information: We also collect other information you may voluntarily provide. This may include content you provide for publication. We may also receive your communications with others through our Website and Services (such as contacting an author through our Website) or communications directly with us (such as through email, feedback or other forms or social media). If you are a subscribed user, we will also collect your user preferences, such as the types of articles you would like to read.

Information from third parties (such as, from your employer or LinkedIn): We may also receive information about you from third party sources. For example, your employer may provide your information to us, such as in connection with an article submitted by your employer for publication. If you choose to use LinkedIn to subscribe to our Website and Services, we also collect information related to your LinkedIn account and profile.

Your interactions with our Website and Services: As is true of most websites, we gather certain information automatically. This information includes IP addresses, browser type, Internet service provider (ISP), referring/exit pages, operating system, date/time stamp and clickstream data. We use this information to analyze trends, to administer the Website and our Services, to improve the content and performance of our Website and Services, and to track users' movements around the site. We may also link this automatically-collected data to personal information, for example, to inform authors about who has read their articles. Some of this data is collected through information sent by your web browser. We also use cookies and other tracking technologies to collect this information. To learn more about cookies and other tracking technologies that JD Supra may use on our Website and Services please see our "Cookies Guide" page.

How do we use this information?

We use the information and data we collect principally in order to provide our Website and Services. More specifically, we may use your personal information to:

  • Operate our Website and Services and publish content;
  • Distribute content to you in accordance with your preferences as well as to provide other notifications to you (for example, updates about our policies and terms);
  • Measure readership and usage of the Website and Services;
  • Communicate with you regarding your questions and requests;
  • Authenticate users and to provide for the safety and security of our Website and Services;
  • Conduct research and similar activities to improve our Website and Services; and
  • Comply with our legal and regulatory responsibilities and to enforce our rights.

How is your information shared?

  • Content and other public information (such as an author profile) is shared on our Website and Services, including via email digests and social media feeds, and is accessible to the general public.
  • If you choose to use our Website and Services to communicate directly with a company or individual, such communication may be shared accordingly.
  • Readership information is provided to publishing law firms and authors of content to give them insight into their readership and to help them to improve their content.
  • Our Website may offer you the opportunity to share information through our Website, such as through Facebook's "Like" or Twitter's "Tweet" button. We offer this functionality to help generate interest in our Website and content and to permit you to recommend content to your contacts. You should be aware that sharing through such functionality may result in information being collected by the applicable social media network and possibly being made publicly available (for example, through a search engine). Any such information collection would be subject to such third party social media network's privacy policy.
  • Your information may also be shared to parties who support our business, such as professional advisors as well as web-hosting providers, analytics providers and other information technology providers.
  • Any court, governmental authority, law enforcement agency or other third party where we believe disclosure is necessary to comply with a legal or regulatory obligation, or otherwise to protect our rights, the rights of any third party or individuals' personal safety, or to detect, prevent, or otherwise address fraud, security or safety issues.
  • To our affiliated entities and in connection with the sale, assignment or other transfer of our company or our business.

How We Protect Your Information

JD Supra takes reasonable and appropriate precautions to insure that user information is protected from loss, misuse and unauthorized access, disclosure, alteration and destruction. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. You should keep in mind that no Internet transmission is ever 100% secure or error-free. Where you use log-in credentials (usernames, passwords) on our Website, please remember that it is your responsibility to safeguard them. If you believe that your log-in credentials have been compromised, please contact us at privacy@jdsupra.com.

Children's Information

Our Website and Services are not directed at children under the age of 16 and we do not knowingly collect personal information from children under the age of 16 through our Website and/or Services. If you have reason to believe that a child under the age of 16 has provided personal information to us, please contact us, and we will endeavor to delete that information from our databases.

Links to Other Websites

Our Website and Services may contain links to other websites. The operators of such other websites may collect information about you, including through cookies or other technologies. If you are using our Website or Services and click a link to another site, you will leave our Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We are not responsible for the data collection and use practices of such other sites. This Policy applies solely to the information collected in connection with your use of our Website and Services and does not apply to any practices conducted offline or in connection with any other websites.

Information for EU and Swiss Residents

JD Supra's principal place of business is in the United States. By subscribing to our website, you expressly consent to your information being processed in the United States.

  • Our Legal Basis for Processing: Generally, we rely on our legitimate interests in order to process your personal information. For example, we rely on this legal ground if we use your personal information to manage your Registration Data and administer our relationship with you; to deliver our Website and Services; understand and improve our Website and Services; report reader analytics to our authors; to personalize your experience on our Website and Services; and where necessary to protect or defend our or another's rights or property, or to detect, prevent, or otherwise address fraud, security, safety or privacy issues. Please see Article 6(1)(f) of the E.U. General Data Protection Regulation ("GDPR") In addition, there may be other situations where other grounds for processing may exist, such as where processing is a result of legal requirements (GDPR Article 6(1)(c)) or for reasons of public interest (GDPR Article 6(1)(e)). Please see the "Your Rights" section of this Privacy Policy immediately below for more information about how you may request that we limit or refrain from processing your personal information.
  • Your Rights
    • Right of Access/Portability: You can ask to review details about the information we hold about you and how that information has been used and disclosed. Note that we may request to verify your identification before fulfilling your request. You can also request that your personal information is provided to you in a commonly used electronic format so that you can share it with other organizations.
    • Right to Correct Information: You may ask that we make corrections to any information we hold, if you believe such correction to be necessary.
    • Right to Restrict Our Processing or Erasure of Information: You also have the right in certain circumstances to ask us to restrict processing of your personal information or to erase your personal information. Where you have consented to our use of your personal information, you can withdraw your consent at any time.

You can make a request to exercise any of these rights by emailing us at privacy@jdsupra.com or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

You can also manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard.

We will make all practical efforts to respect your wishes. There may be times, however, where we are not able to fulfill your request, for example, if applicable law prohibits our compliance. Please note that JD Supra does not use "automatic decision making" or "profiling" as those terms are defined in the GDPR.

  • Timeframe for retaining your personal information: We will retain your personal information in a form that identifies you only for as long as it serves the purpose(s) for which it was initially collected as stated in this Privacy Policy, or subsequently authorized. We may continue processing your personal information for longer periods, but only for the time and to the extent such processing reasonably serves the purposes of archiving in the public interest, journalism, literature and art, scientific or historical research and statistical analysis, and subject to the protection of this Privacy Policy. For example, if you are an author, your personal information may continue to be published in connection with your article indefinitely. When we have no ongoing legitimate business need to process your personal information, we will either delete or anonymize it, or, if this is not possible (for example, because your personal information has been stored in backup archives), then we will securely store your personal information and isolate it from any further processing until deletion is possible.
  • Onward Transfer to Third Parties: As noted in the "How We Share Your Data" Section above, JD Supra may share your information with third parties. When JD Supra discloses your personal information to third parties, we have ensured that such third parties have either certified under the EU-U.S. or Swiss Privacy Shield Framework and will process all personal data received from EU member states/Switzerland in reliance on the applicable Privacy Shield Framework or that they have been subjected to strict contractual provisions in their contract with us to guarantee an adequate level of data protection for your data.

California Privacy Rights

Pursuant to Section 1798.83 of the California Civil Code, our customers who are California residents have the right to request certain information regarding our disclosure of personal information to third parties for their direct marketing purposes.

You can make a request for this information by emailing us at privacy@jdsupra.com or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

Some browsers have incorporated a Do Not Track (DNT) feature. These features, when turned on, send a signal that you prefer that the website you are visiting not collect and use data regarding your online searching and browsing activities. As there is not yet a common understanding on how to interpret the DNT signal, we currently do not respond to DNT signals on our site.

Access/Correct/Update/Delete Personal Information

For non-EU/Swiss residents, if you would like to know what personal information we have about you, you can send an e-mail to privacy@jdsupra.com. We will be in contact with you (by mail or otherwise) to verify your identity and provide you the information you request. We will respond within 30 days to your request for access to your personal information. In some cases, we may not be able to remove your personal information, in which case we will let you know if we are unable to do so and why. If you would like to correct or update your personal information, you can manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard. If you would like to delete your account or remove your information from our Website and Services, send an e-mail to privacy@jdsupra.com.

Changes in Our Privacy Policy

We reserve the right to change this Privacy Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our Privacy Policy will become effective upon posting of the revised policy on the Website. By continuing to use our Website and Services following such changes, you will be deemed to have agreed to such changes.

Contacting JD Supra

If you have any questions about this Privacy Policy, the practices of this site, your dealings with our Website or Services, or if you would like to change any of the information you have provided to us, please contact us at: privacy@jdsupra.com.

JD Supra Cookie Guide

As with many websites, JD Supra's website (located at www.jdsupra.com) (our "Website") and our services (such as our email article digests)(our "Services") use a standard technology called a "cookie" and other similar technologies (such as, pixels and web beacons), which are small data files that are transferred to your computer when you use our Website and Services. These technologies automatically identify your browser whenever you interact with our Website and Services.

How We Use Cookies and Other Tracking Technologies

We use cookies and other tracking technologies to:

  1. Improve the user experience on our Website and Services;
  2. Store the authorization token that users receive when they login to the private areas of our Website. This token is specific to a user's login session and requires a valid username and password to obtain. It is required to access the user's profile information, subscriptions, and analytics;
  3. Track anonymous site usage; and
  4. Permit connectivity with social media networks to permit content sharing.

There are different types of cookies and other technologies used our Website, notably:

  • "Session cookies" - These cookies only last as long as your online session, and disappear from your computer or device when you close your browser (like Internet Explorer, Google Chrome or Safari).
  • "Persistent cookies" - These cookies stay on your computer or device after your browser has been closed and last for a time specified in the cookie. We use persistent cookies when we need to know who you are for more than one browsing session. For example, we use them to remember your preferences for the next time you visit.
  • "Web Beacons/Pixels" - Some of our web pages and emails may also contain small electronic images known as web beacons, clear GIFs or single-pixel GIFs. These images are placed on a web page or email and typically work in conjunction with cookies to collect data. We use these images to identify our users and user behavior, such as counting the number of users who have visited a web page or acted upon one of our email digests.

JD Supra Cookies. We place our own cookies on your computer to track certain information about you while you are using our Website and Services. For example, we place a session cookie on your computer each time you visit our Website. We use these cookies to allow you to log-in to your subscriber account. In addition, through these cookies we are able to collect information about how you use the Website, including what browser you may be using, your IP address, and the URL address you came from upon visiting our Website and the URL you next visit (even if those URLs are not on our Website). We also utilize email web beacons to monitor whether our emails are being delivered and read. We also use these tools to help deliver reader analytics to our authors to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

Analytics/Performance Cookies. JD Supra also uses the following analytic tools to help us analyze the performance of our Website and Services as well as how visitors use our Website and Services:

  • HubSpot - For more information about HubSpot cookies, please visit legal.hubspot.com/privacy-policy.
  • New Relic - For more information on New Relic cookies, please visit www.newrelic.com/privacy.
  • Google Analytics - For more information on Google Analytics cookies, visit www.google.com/policies. To opt-out of being tracked by Google Analytics across all websites visit http://tools.google.com/dlpage/gaoptout. This will allow you to download and install a Google Analytics cookie-free web browser.

Facebook, Twitter and other Social Network Cookies. Our content pages allow you to share content appearing on our Website and Services to your social media accounts through the "Like," "Tweet," or similar buttons displayed on such pages. To accomplish this Service, we embed code that such third party social networks provide and that we do not control. These buttons know that you are logged in to your social network account and therefore such social networks could also know that you are viewing the JD Supra Website.

Controlling and Deleting Cookies

If you would like to change how a browser uses cookies, including blocking or deleting cookies from the JD Supra Website and Services you can do so by changing the settings in your web browser. To control cookies, most browsers allow you to either accept or reject all cookies, only accept certain types of cookies, or prompt you every time a site wishes to save a cookie. It's also easy to delete cookies that are already saved on your device by a browser.

The processes for controlling and deleting cookies vary depending on which browser you use. To find out how to do so with a particular browser, you can use your browser's "Help" function or alternatively, you can visit http://www.aboutcookies.org which explains, step-by-step, how to control and delete cookies in most browsers.

Updates to This Policy

We may update this cookie policy and our Privacy Policy from time-to-time, particularly as technology changes. You can always check this page for the latest version. We may also notify you of changes to our privacy policy by email.

Contacting JD Supra

If you have any questions about how we use cookies and other tracking technologies, please contact us at: privacy@jdsupra.com.

- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.